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For a GENERAL insurance business under Section 27(2) of the Insurance Act 1938, the insurer must invest in Government securities at least:
A{'text': '10 % of assets', 'letter': 'A'}
B{'text': '20 % of assets', 'letter': 'B'}
C{'text': '25 % of assets', 'letter': 'C'}
D{'text': '30 % of assets', 'letter': 'D'}
Answer & Solution
Correct answer: B. {'text': '20 % of assets', 'letter': 'B'}
1. Section 27(2) covers general (non-life) insurance investment norms.
2. It specifies a baseline Govt-securities percentage plus a Govt-or-approved-securities slab.
3. Twenty per cent of the assets must be in Government Securities, plus not less than 10% more in Govt or approved.
_Source: Insurance Act 1938 (incorporating amendments till 2021), noc.irdai.gov.in — "In the case of an insurer carrying on general insurance business, twenty per cent. of the assets in Government Securities"_